Charlie Javice, who is charged with defrauding JPMorgan Chase & Co into buying her now-shuttered college financial aid startup Frank for $175 million in 2021, arrives at United States Court in Manhattan in New York City, June 6, 2023.
Mike Segar | Reuters
Charlie Javice, founder of a startup purchased by JPMorgan Chase in 2021, was convicted in federal court Friday of defrauding the bank by vastly overstating the company’s customer list.
The jury decision comes after weeks of testimony in New York over who was to blame for the flameout of a once-promising startup. Frank, founded by Javice in 2016, aimed to help users apply for college financial aid.
JPMorgan has accused Javice, 32, of duping the bank into paying $175 million for a company that had more than 4 million customers, when in reality it had fewer than 300,000.
The largest U.S. bank by assets sued Javice in late 2022 after attempting to send marketing emails to some of the thousands of “customers” it thought Frank had. In its suit, JPMorgan released emails in which Javice hired a data scientist to generate a fake roster of customers.
Then, in April 2023, the Justice Department charged Javice with four crimes including wire and bank fraud, counts which carried lengthy maximum sentences. Javice was arrested at Newark airport on April 3 of that year and had been out on bail.
Sentencing will happen at a later date, per news reports.
A spokesperson for JPMorgan declined to comment.
This story is developing. Please check back for updates.
